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Home Credit Group Reports 2017 Financial Results, China delivered strong performance

BEIJING, March– Home Credit B.V. (‘HCBV’ or ‘the Group’) announced the IFRS consolidated results for the 12-month period ended December 2017.

The Group maintained growth momentum across its global operations in 2017, which resulted in an increase in net profit to EUR 244 million. The Group again demonstrated that the strength of its portfolio, geographical diversification and its ability to execute, underpin its leading position in consumer finance, especially in the fast-growing mobile communications financing market. China performed as a significant contributor in a growing and structurally improving market, where Home Credit China issued EUR 13.3 billion in new loans in 2017.

Home Credit’s global in-store presence, incorporating 399,228 points of sale, is a key pillar of its distribution model. This is complemented by online lending offers to existing, lower-risk customers. In addition, the Group’s significant scale in its key markets, including Russia, China and India, makes it an attractive partner for major retailers and manufacturers. The Group is also increasingly transforming itself into a consumer finance fintech. It has introduced fully paperless processes, chatbots, QR-code based revolving products and multi-functional mobile applications. Newly-digitized processes have also translated into enhanced customer experience. Meanwhile, fintech innovations have improved our risk analytics and give our scorecards much stronger predictive power, leading to faster approvals. This combination provides greater efficiency and better cross-selling opportunities.

In China, Home Credit issued EUR 13.3 billion in new loans in 2017, compared to EUR 6.7 billion in 2016, and continued focusing on customers underserved by traditional banks. Home Credit China has achieved scale and is now focused on implementing a number of initiatives to increase efficiency across front- and back-end processes. Accordingly, the business is fine-tuning its distribution network, expanding alternative models which are operated directly by partnering retailers, and continues to roll-out innovative fintech features to further optimize costs. As the Group prudently continues to grow its online business, the proportion of customers’ self-service through online processes has materially increased. Home Credit China introduced a revolving loan designed for this market: a QR code-based product for the purchase of consumer durables with a discount, which is instantly available through our mobile app.

At the same time, Home Credit continues to be rated highly for financial inclusion and customer experience in the prestigious study by The Center for China in the World Economy (CCWE) at Tsinghua University.

Mr. Jiri Smejc, Group CEO and Chairman of the Board of Directors of Home Credit B.V. says: “In 2017, the Group delivered a strong performance across our portfolio of businesses, resulting in good, broad-based profit growth. Within all markets, we have substantially strengthened our market shares and further consolidated our leadership positions while intensifying our focus on implementing efficiency improvements. In China, we have now successfully established a scale position, and we continue leading the segment of in-store lending in this significant market. As we enter 2018, Home Credit remains very well positioned. We have built scale across our growth markets and we are seeing improving customer satisfaction and enhanced competitiveness across the Group. I remain highly confident in the ability of our employees and the Group to deliver.”


  • The Group posted a net profit of EUR 244 million in 2017, compared to EUR 210 million in 2016. This is comprised of EUR 256 million attributable to shareholders of Home Credit B.V. and EUR -12 million that falls under the Group’s consolidated reporting but is attributable to our joint venture partner in the U.S. The profit was mainly driven by a strong performance in Russia and continued growth across our mature businesses in Asia.
  • New loan volumes totaled EUR 20,693 million in 2017, an increase of 79.4% from EUR 11,536 million in 2016. In Asia, new loan volumes were particularly strong, almost doubling in China to EUR 13 billion.
  • Home Credit continued to diversify its funding sources by expanding its portfolio of funding partners and instruments, which has led to a more stable funding base and lower costs. In China, the number of banking partners increased almost four-fold alongside a continued program of capital market issuance.
  • The number of active customers reached 29.9 million as of 31 December 2017, from 20.1 million a year ago.
  • The quality of the Group’s loan portfolio slightly decreased due to higher loan volumes, which was compensated by the roll-out of risk-based pricing. Through the course of the year, the Group further enhanced its risk prediction models to limit the volatility of risk costs. These enhanced models were introduced to most of our businesses in 2017 and will be rolled out to the rest of the Group this year. The NPL share (i.e. loans more than 90 days overdue) of the gross loan book was 6.9% as at 31 December 2017 (6.1% as of 31 December 2016), while NPL coverage remained at a conservative 121.7% (compared to 128.2% in 2016). The Cost of Risk Ratio increased to 8.9% from 7.6% a year earlier.
  • Operating income increased to EUR 3,123 million (2016: EUR 2,000 million) driven by an increase in net interest income to EUR 2,417 million (2016: EUR 1,532 million).
  • The Group’s general administrative and other operating expenses rose in 2017 to EUR 1,626 million from EUR 1,115 million a year earlier. The Cost to Income Ratio for 2017 fell to 52% from 55.7% in 2016.
  • HCBV’s customer deposits increased 17.7% to EUR 6,356 million as of 31 December 2017, from EUR 5,401 million in 2016.
  • The Group’s capitalization remained solid with total equity of EUR 2,028 million and an Equity to Asset Ratio of 9.4%.
  • HCBV’s multi-channel network consisted of 399,228 distribution points globally as of 31 December 2017, up 47.6% compared to 2016. In addition, the Group has strongly expanded its online presence.